Government accelerates efforts to register 10,000 FPOs by Dec

About 8,875 farmers’ collectives have been registered so far. The government has increased allocation for FPOs formation for the current fiscal to Rs 581 crore, an increase of 30% from allocation of Rs 450 crore as revised estimate for FY24.

The Indian government is set to achieve its goal of forming 10,000 Farmer Producer Organisations (FPOs) by year-end, enhancing farmers’ collective bargaining power, reducing input costs, and improving market access. 

As of now, 8,875 FPOs have been registered under the companies or cooperatives acts through a central scheme aimed at boosting farmers’ income.

“We are expected to achieve the target of registering 10,000 FPOs a few months ahead of the target,” according to an official.

About 14 agencies are engaged in registering and on-boarding of FPOs. Of these, the Small Farmers’ Agri-Business Consortium registered 3,620 FPOs, followed by Nabard (1,694), National Cooperative Development Corporation (1,863), Nafed (1,191), and the Foundation for Development of Rural Value Chains (800). 

The scheme, launched in 2020 with a budget of Rs 6,865 crore, aims to create 10,000 FPOs by March 2025. For the current fiscal year, the government increased the allocation for FPO formation to Rs 581 crore, a 30% rise from the previous year.

Under the scheme, FPOs receive up to Rs 1.8 million in financial assistance over three years, along with matching equity grants up to Rs 2,000 per farmer member, capped at Rs 1.5 million per FPO. 

A credit guarantee facility of up to Rs 20 million per FPO project loan is also provided. So far, Rs 210 crore in equity grants have been released to 3,325 FPOs, and credit guarantees worth Rs 337 crore have been issued to 1,185 FPOs.

The Agriculture Minister Shivraj Singh Chouhan has directed the establishment of a network of quality seed and pesticide suppliers through FPOs. Direct sourcing of these inputs by FPOs is expected to reduce costs by 33-35% for pesticides and 15% for seeds. Besides supplying inputs, FPOs aggregate, clean, assay, and process members’ produce and offer machinery and equipment on a custom hiring basis. 

FPOs with at least 300 members in plain regions and 100 members in northeastern and hilly areas are eligible for assistance.